Simplified Eurosystem balance sheet

The liquidity needs of the banking system result from the minimum
reserve requirements imposed on euro area credit institutions and
from autonomous factors , which are normally beyond
the direct control of the ECB. Such factors can be banknotes in
circulation and government deposits with some national
central banks.

The ECB normally aims to satisfy the liquidity needs of the banking
system via its open market operations.

Finally, counterparties can access the Eurosystem's standing
facilities with an overnight maturity.

Reflecting non-standard monetary policy measures

The regular publication of figures relating to the liquidity
position of the euro area banking system vis-à-vis the Eurosystem
also takes into account all non-standard monetary policy measures
that have been used since August 2007:

Covered Bond Purchase Programme: The liquidity
provision coming from the covered bond purchase programme is
displayed under open market operations.

Covered Bond Purchase Programme 2: The liquidity
provision coming from the second covered bond purchase programme is
displayed under open market operations.

Securities Markets Programme*: The liquidity
provision coming from the securities markets programme is displayed
together with autonomous factors under an item called “Net liquidity
effect from autonomous factors and SMP”. The liquidity-absorbing
operations that are carried out to sterilize the liquidity provided
through the SMP are shown under open market operations.

Foreign exchange swap operations: The euro
liquidity absorption resulting from the provision of foreign
currency to Eurosystem counterparties via FX swaps was discontinued
in January 2010. Until June 2009, this euro liquidity absorption was
displayed under autonomous factors, while thereafter is has been
part of outstanding open market operations.